Births, the Composition of Households, and Their Implications for Household Economy in Market Transition Societies: China and Vietnam Compared

Kim Korinek, University of North Carolina at Chapel Hill
Soumya Alva, Westat, Inc.
Feinian Chen, Texas A&M University

Through comparative, longitudinal analyses of households located in China and Vietnam, as captured in three distinct household surveys, we demonstrate that the recent incidence of a birth and shifting household composition influence household-level economic activity. We find that household economic activity, that is, whether a household operates a family business, engages in the wage sector, or diversifies across multiple sectors, varies over time and that the birth of a child increases the odds of both household entrepreneurship and diversification. The gender and age composition of households is also important for shifting household economic activities. In Chinese and Vietnamese households, greater numbers of adult males, more so than females, increase the odds of all three market-based activities-entrepreneurship, wage employment and sectoral diversification. Together, the pooled, comparative analyses suggest there are salient rural-urban differences in the household composition-household economy relationship. These results inform the logic of fertility limitation policies in market transition settings.